Is the divorce rate REALLY 50%?

American media has long been interested in divorce rates among our population. Common, yet incorrect, knowledge is that 50% of marriages end in divorce.

There are two common data sets used to determine divorce rates. The American Census and the American Community Survey. The Census is taken every ten years and thus provides large scale data infrequently while the American Community Survey, performed by the same government entity, is done on smaller scale every year.

There are a few key points to understanding divorce rates

If an individual has divorce once they are more likely to have a second marriage end in divorce. The more times one has been married the more likely they are to experience a divorce ending future marriages. This reality can skew data given the potential for one individual to be married and divorced 3 or 4 times during their lives.

Both men and women between 21 and 40 are getting married later in life than ever in history. Divorce rates may ultimately remain the same for this generation but the divorces may have simply not happened yet because their marriages are still relatively new.

Older generations are living longer, increasing the likelihood a marriage will end in divorce rather than widowhood. Wellspring Divorce Advisors refers to these late life divorces as Gray Divorce.

Add to these complications the differences in demographic subsets and it makes the actual divorce rate hard to determine. So where can we turn?

Wellspring Divorce Advisors recently came upon an interactive info-graphic at FlowingData showing Divorce Rates for Different Groups. While no final determination is made by the data the interactive chart, based on American Community Survey and other data provides a pretty interesting overview of divorce rates based upon race, education, age and employment status. Check it out in the links above.

Wellspring Divorce Advisors helps individuals and couples address the financial aspects of divorce in a civilized, equitable, and efficient manner by providing expert divorce financial planning and advice. Contact us to find out how we can help you through this process.

Let’s take a look.

If you’re wondering how much a divorce costs, you’re not alone. In fact, that is probably one of the first things people think of when they contemplate ending their marriage.

And for this question…we have a very concrete answer for you: It depends on the situation.

Yes, unfortunately each scenario is different. But that doesn’t mean that we can’t give you a better idea of what might make the difference between a reasonable and costly divorce.

Substantial or complicated assets may contribute to a higher cost.

If you own a small business and take liberties with deducting your personal expenses as business expenses on your taxes your divorce cost will be higher.

Significant separate property claims between you and your spouse could have an impact.

Unproductive and disrespectful discussions with your spouse can also drive the cost up.

Other issues.

In our experience the most expensive divorces are fought by two parties who HATE each other for one reason or another. Sadly, the legal system is structured in such a way that these two individuals are often more angry at the end of the process than they were at the outset. It also depends on the attorney’s hourly rate and if he or she is inclined to encourage a settlement. Hiring the most expensive attorney in town known for being a shark will increase your divorce cost.

How we can help.

Wellspring Divorce Advisors coaches clients to think of their potential divorce cost as a continuum from highest to lowest rather than absolute dollar terms.

Ranked below are your process options ranked highest to lowest in cost. We have seen litigation cases cost millions of dollars in fees and mediation cases with equivalent amounts of assets done for $15,000.

Litigation

Adversarial with Settlement

Collaborative Divorce

Mediation

Pro-Per

Click here for a brief overview of your main options or call us for an overview and consultation to help you choose. Our experience has shown the engagement with Wellspring Divorce Advisors will reduce your overall cost significantly.

One more thing.

A failed mediation can easily land you in a litigation model and cost even more. Make sure you understand mediation before opting in. The model is often misunderstood and full of less than reputable professionals.

It depends on the situation; for example, if you have substantial or complicated assets your divorce cost may be higher. If you own a small business and take liberties with deducting your personal expenses as business expenses on your taxes your divorce cost will be higher. If you or your spouse have significant separate property claims your divorce cost will be higher. If you cannot have productive and respectful discussions with your spouse your divorce cost will be higher. In our experience the most expensive divorces are fought by two parties who HATE each other for one reason or another. Sadly the legal system is structured in a way leaving these two hateful individuals more angry at the end of the process than they were at the outset. It also depends on the attorney’s hourly rate and if he or she is inclined to encourage a settlement. Hiring the most expensive attorney in town known for being a shark will increase you divorce cost.

Wellspring Divorce Advisors coaches clients to think of their potential divorce cost as a continuum from highest to lowest rather than absolute dollar terms. Click here for a brief overview of your main options from proceeding or call us for an overview and consultation to help you choose. Our experience has shown the engagement with Wellspring Divorce Advisors will reduce your overall cost significantly.

Ranked below are your process options ranked highest to lowest in cost. We have seen litigation cases cost millions of dollars in fees and mediation cases with equivalent amounts of assets done for $15,000.

Litigation

Adversarial with Settlement

Collaborative Divorce

Mediation

Pro-Per

Caveat: A failed mediation can easily land you in a litigation model and cost even more. Make sure you understand mediation before opting in. The model is often misunderstood and full of less than reputable professionals.

Temporary orders are usually issued regarding child custody, child support, spousal support and use or possession of assets. They cover the time period between the time that the divorce petition is filed and the time that the judgement of divorce is issued. Orders of any type are legal matters requiring the attention of legal counsel. Wellspring Divorce Advisors requires all of our clients consult with legal counsel to make sure they understand their legal rights and obligations.

Divorce is not a fast process. It is a legal, emotional and financial process often lasting years from the date a petition for dissolution is filed. Because of the often long periods of time passing between petition and judgment the court is often asked to make temporary orders on certain pieces of the case. Temporary Orders are important from a financial perspective because they are designed to protect the parties from risks that appear during pending dissolution proceedings. Risks might include a full time mother and homemaker being cut off from family bank accounts and by extension unable to pay bills. They may be entered for the sole purpose of providing clarity and guidelines to parents as to their obligations to support minor children. There may also be reasons to make orders for a party to continue supporting the costs of a marital asset in order to protect credit scores. Temporary orders could also be used in situations where extensive financial data gathering is under way and the court simply lacks complete information to make longer term decisions.

Following are some examples of temporary orders related to finances we have seen in our practice. We have provided links to California self help websites where possible.

Order for Temporary Alimony or Spousal Support – A temporary order for alimony is often entered to ensure both parties have the ability, to the extent possible, to maintain the marital standard of living they enjoyed during marriage. At the very least the temporary order is put in place to provide necessary funds to a non-working or lower earning spouse to support themselves during pending litigation or settlement discussions. In California the amount of temporary alimony will usually be calculated by a computer program called Dissomaster based upon historical and current incomes of both parties. Note: Temporary spousal support is almost always higher than long term spousal support in our experience.

Order for Temporary Child Support – A temporary child support order provides necessary funds to a non-working or lower earning spouse to support the expenses necessary to support minor children. The amount of temporary child support will be based upon the incomes of both parties as well as the needs of the children. If, for example, the children have special needs or attend private schools, orders may be entered to cover the associated expenses of specific items.

Order for Sole Use and Possession of the Marital Residence – In more contentious cases parties may argue over who should move out of the marital residence during the pending litigation. It may be necessary in this case to grant one party sole use and possession of a marital home on a temporary basis while litigation or settlement discussions proceed.

Automatic Temporary Restraining Orders – in most jurisdictions the filing of a petition for marital dissolution in accompanied by temporary orders restraining either party from selling, encumbering or otherwise disposing of an asset. The orders may also restrict you from changing beneficiaries on insurance or retirement funds.

Just because a payment is called “spousal support” or alimony does not mean that the IRS will view is that way. The following requirements must be met for a payment to qualify as spousal support. We call them the eight D’s of alimony.

1) Dollars must be received by or on behalf of a spouse

2) Documented by a divorce or separation agreement

3) Designation of payments: cannot opt out of §71 or §215

4) Distance: couple cannot live in the same residence

5) Dependents cannot change alimony

6) Dual returns: separate tax returns must be filed

7) Dumping: front-loaded payments are not allowed and may subject the payor to alimony recapture